Development Agreements – when are they exempt?

1. Development Agreements – when are they exempt? Cyrus Mehta, Partner Nabarro LLP 58151864

2. Land transactions • “Pure” land transactions (transfers, leases, licences) are not caught • Public works contracts: • for the carry out of works • contracting authority “engages a person” to carry out works • Regulation 6 (2)(e) – exemption for contracts for the acquisition of land and (existing) buildings • But state aid requirements: Commission’s Notice on sale of land and buildings

3. “Mixed” contracts • Gestion Hotelera • “main object” test • “incidental” works • Article 1(2)(b) Directive: “Public contracts having as their object …” • Quedlinburg • “main purpose” was not acquisition of land, but procurement of building • Example: leases with covenants to refurbish • “Severability” of works

4. Contractual commitment to develop • Contract: • for works • contracting authority engages a person … • “contract” has a Community law definition (see AG in City of Cologne) • Does an intention or expectation suffice? • Context of development • Flensburg case • sanctions for failure to develop • re-acquisition of property • but how specific can requirements be?

5. Contractual commitment to develop cont .. • ECJ reference in Mueller • “specified requirements” • how specific? • outline parameters do not suffice? • Development “opportunities” as works concessions? • But still need to show “works contract”

6. Miscellaneous • Regulation 34 – subsidised works contracts • Use of public/private SPVs for development • unlikely to be “in-house” (Teckal etc.) • is there a “works” contract? • Commission’s IPPP notice • Planning obligations : quality standards, e.g. Code for Sustainable Homes

7. Summary Where EU procurement rules may not apply: • “pure” land transactions • contracts where “main object” is disposal of land • no contractual commitment to develop • contracts with outline specification